Degrees of Value

A recent feature on the satire website the Onion proclaimed, “30-Year-Old Has Earned $11 More Than He Would Have Without College Education.” Allowing for tuition, interest on student loans, and four years of foregone income while in school, the fictional student “Patrick Moorhouse” wasn’t much better off. His years of stress and study, the article japed, “have been more or less a financial wash.”

“Patrick” shouldn’t feel too bad. Many college graduates would be happy to be $11 ahead instead of thousands, or hundreds of thousands, behind. The credit-driven higher education bubble of the past several decades has left legions of students deep in debt without improving their job prospects. To make college a good value again, today’s parents and students need to be skeptical, frugal and demanding. There is no single solution to what ails higher education in the U.S., but changes are beginning to emerge, from outsourcing to online education, and they could transform the system.

Though the GI Bill converted college from a privilege of the rich to a middle-class expectation, the higher education bubble really began in the 1970s, as colleges that had expanded to serve the baby boom saw the tide of students threatening to ebb. Congress came to the rescue with federally funded student aid, like Pell Grants and, in vastly greater dollar amounts, student loans.

Predictably enough, this financial assistance led colleges and universities to raise tuition and fees to absorb the resources now available to their students. As University of Michigan economics and finance professor Mark Perry has calculated, tuition for all universities, public and private, increased from 1978 to 2011 at an annual rate of 7.45%. By comparison, health-care costs increased by only 5.8%, and housing, notwithstanding the bubble, increased at 4.3%. Family incomes, on the other hand, barely kept up with the consumer-price index, which grew at an annual rate of 3.8%.

For many families, the gap between soaring tuition costs and stagnant incomes was filled by debt. Today’s average student debt of $29,400 may not sound overwhelming, but many students, especially at private and out-of-state colleges, end up owing much more, often more than $100,000. At the same time, four in 10 college graduates, according to a recent Gallup study, wind up in jobs that don’t require a college degree.

Students and parents have started to reject this unsustainable arrangement, and colleges and universities have felt the impact. According to a recent analysis by this newspaper, private schools are facing a long-term decline in enrollment.

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Don M.: Armor commanders in the 1970s reprimanded infantry commanders if they used reverse slope defenses: They thought with a moment’s thought they could convert from defender to attacker, and intended to dominate the enemy’s forward slope. Of course if you could attack, or had adequate fire to dominate the enemy’s forward slope, you wouldn’t be defending.

Toddy Cat: “Jones recommends six-year terms for the House and more autonomous agencies like the Fed.” Congratulations, Mr. Jones, you are a leading contender for the 2015 Mencius Moldbug award, for doing an outstanding job of identifying a real problem, and then coming up with an utterly inadequate or unworkable solution!

Victor: With an incumbency rate greater than 90%, I think House members already have six year terms, if not more.

Dan Kurt: Democracies self destruct. Fiddling with the machinery is just moving the deck chairs on the Titanic after it hit the berg.

Letters in a Box: The problem is that over time, the system becomes more and more gamed as it is more and more understood. There should be an injection of randomness somehow in order to make it somewhat unpredictable. There should be constitutionally mandated lotteries inserted into the system somewhere, somehow, at some random times. I’m not enough of a wonk to know where, or how, but I can picture maybe a random 6 year term for some office holders, or having jury members (that have not been...

Lu An Li: The moment I read this article I think of Calvin Perry III and his interrogation. Young man accused of a mass murder in Ft. Wayne IN. Calvin finally hung himself before being charged for the murders. Confessed freely and openly and it was all recorded on video and audio. Seen this video and heard the audio and it was remarkable how easily the man gave it all up. The experts on interrogations all agree that the interrogation was text book perfect and ought to be used as a training tool for...

Tim: Interesting, but what about the moral fortitude of the “accused.” Personally I wouldn’t admit to anything as an innocent person. Make a credible threat against my family and I would take the fall since protecting them has a higher value than protecting myself.

J.D. Saunders: Psych studies in all this were conducted 40–50 years ago, roughly during the period between Milgram’s seminal “Obedience to authority” study and the Stanford Prison Experiment. Cult indoctrination methods and standard interrogation methods were thoroughly researched. Little has changed in the interim.